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NAB hikes 2, 3, 4 year fixed rates

·2-min read
Aerial view of Australian houses, pedestrians cross the road in Sydney.
Mortgage-holders across Australia can expect their interest rates to increase. (Images: Getty).

NAB has hiked its two- and three-year fixed rates by 0.10 per cent, leaving just one interest rate below 2 per cent at the major bank.

It has also increased its four-year fixed rates by 0.05 per cent.

The interest rate hikes apply only to owner-occupiers paying principal and interest on fixed rate loans.

The move on Wednesday takes the two-year fixed rate to 1.99 per cent and the three-year rate to 2.08 per cent.

“We regularly review our interest rates to ensure we continue to offer our customers competitive rates while responding to market changes," NAB executive, home ownership, Andy Kerr said.

“These changes do not impact the rates of our existing customers. Our 2-year Choice Package Owner Occupied P&I fixed rate product remains under 2 per cent and we encourage our customers to speak with us about the product that best suits their needs.”

Why are Australian banks hiking interest rates?

“NAB is following in what is now a well-worn path of fixed rate hikes from the banks,” RateCity.com.au research director Sally Tindall said.

ANZ and Westpac recently hiked rates, both by 0.10 per cent.

While the majority of hikes are still focused on longer-term fixed rates, in the last few weeks we’ve started to see a rise in the number of lenders hiking two-year rates, including from NAB today,” Tindall said.

The major bank’s hike comes as the Reserve Bank of Australia expires its term funding facility (TFF) today.

The TFF provided banks cheap money fixed at 0.10 per cent for three years.

“With this option off the table from tomorrow, banks will have to look elsewhere for cheap funding and the alternatives are likely to come with a higher price tag,” she said.

While NAB ‘s two-year fixed rate is its only rate below 2 per cent, she added that there are still 191 rates below 2 per cent on the RateCity database.

“Don’t rush out and panic fix just because you think you might miss out on a good deal.

“Fixed rates have lots of extra terms and conditions that can limit your ability to get ahead on your loan. Take the time to work out what type of loan best suits your finances before you jump in.”

The Reserve Bank will next meet on Tuesday 6 July to discuss current interest rate settings.

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Image: Yahoo Finance
Image: Yahoo Finance
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